The first question you should ask yourself is why you want to invest in South Bay real estate. Most people are seeking financial independence. Some people want their assets to grow, some want an ongoing income stream and some want tax advantages. The good news about Real Estate is you can have all three!

Many people save and invest their entire working lives so that they can retire with enough money to live whatever lifestyle they want when they stop working. The big question is “How much money do I need to put away to support that lifestyle?” Well, if you want to have $100,000 a year to live on, you will need to have about 20 times that ($2,000,000) invested to meet that income need at retirement. Then, whatever annual dollar amount you need today, you will probably need double that every 15 years. 

One of the best things about real estate investing is it offers you leverage. Think of it this way, if you have $10,000 invested in a stock or bond that returns 5%, you will earn a 5% return or $500. If you put $10,000 down on a $200,000 piece of property and it goes up 5%, you just doubled your money or $10,000. That’s 100% return! Then, if you take into consideration that you could have received some cash flow, and your tenants are paying down your loan, and you get to write off depreciation and other expenses, 200% annual returns are not uncommon.

A good indicator for buying cash flow properties is what we call a “cash on cash” return. If it took $10,000 out of your pocket to buy a property that cash flows $250 a month ($3,000 a year), that’s a 30% return on your cash. 

The first thing that needs to be done is to find out how much money you can borrow. You need to talk to a lender that is familiar with investment real estate. A good lender can advise you as to what strategies you should employ based on your credit scores, savings and income. Once you know what you can qualify for, then you are ready to go on to the next step.

Determining which is the right area to invest is the next step. If you are primarily looking for appreciation, you will want to focus on the high-demand coastal areas. If you are looking for cash flow you may want to look in more established areas inland. I always advise looking for homes/units near major transportation centers or employment centers or universities, etc. 

Finally, you need to conduct due diligence. There are no short cuts here. It’s very important to investigate what you intend to invest in. What is the property really worth, what are the vacancy rates, what are the property tax rates, what does the owner typically pay for – utilities, lawn care, etc., is there a Home Owners Association and how will you manage the property and how much will a management company cost you?

The South Bay is a region just South of the City of Los Angeles that encompasses the smaller regional areas Beach Cities and the Palos Verdes Peninsula. Torrance is a large enough city that it is usually not included in these subcategories of the South Bay.

Manhattan Beach Real Estate Investing: What is a VA Loan Foreclosure?

A quick check of a VA loan foreclosure will reveal that this isn’t made to be understood at first glance. Just like anything in this world, a complete understanding of what foreclosure and repossession is will require a second or a third look on the matter. Though repossession and foreclosures may not copy the usual characteristics that come with real estate buying in Manhattan Beach, there are still some features that make repossession and foreclosures unique.

Read Also: Torrance California VA Home Foreclosures

Here are some features that help make repossessions a league different from real estate buying; you don’t need shell out money for a down payment and interest rates used are low.

Tell someone that his Manhattan Beach property will be repossessed and chances are, he will be alarmed and frightened. And who wouldn’t be? A property will be lost, and if it’s their home then tomorrow they will not have a shelter that they can call their own. The news of foreclosure brings images of homelessness, but it should be remembered as well that there is something good that will come out of this bad dream.

Read Also: Torrance California Short Sales – Is it right for you?

VA Loan Foreclosures: A Not-So-Bad Concept

A number of other images and impressions will register on different persons when they hear the words “foreclosure” and “repossession.” Though these may produce conflicting feelings, there is one thing that that emanates from it that shouldn’t be dismissed outright. That one thing is the fact that foreclosures like the VA loan foreclosure isn’t always negative. It may share the stage with loans and mortgages, but there is something good about this concept.

Read Also: Torrance California Mortgage for those that are credit challenged!

What is good in a thing wherein a person is going to lose his property? Just remember that the goodness lies in the fact that another person can take advantage of the property at a lower price. This realization alone should push a person to think more about the concept of repossession and foreclosures and help erase some of the negativity that was traditionally attached to the concept.

Foreclosures and repossessions like the VA loan foreclosures are true and there is no escaping these things. The only thing that a person can do is to accept the fact that he no longer has the capability to continue owning his Manhattan Beach property. And for the other parties around, this can be a source of hope as well. Why is this so? It’s because the repossession market can be their lifesaver; a place where they can find their shelter at significantly lower price. The cost of getting a house using this market is lower compared with the traditional way of getting properties in the real estate market. If you are one of those who are searching for a home in Manhattan Beach, then let the Department of Veteran Affairs help you.

There is goodness in knowing what VA loan foreclosure is and here are some things that can help you change your mind about loan foreclosure coming from VA.

• Closing costs will be handled for you.
• Savings are realized and there is no need to insurance like private mortgage insurance.
• Equity is automatically given if you decide to purchase the Manhattan Beach property.
• Financing will be offered the moment the sale of the reposed home is deemed successful.

This is the avenue that you should take if you are thinking of getting cheaper properties in Palos Verdes Peninsula. VA loan foreclosure is your platform when seeking cheaper properties and homes.

Thinking of Real Estate Ownership in the South Bay Area?

If you’ve always wanted to own a home in the South Bay area, in the one of the Beach Cities (Manhattan Beach, Hermosa Beach and Redondo Beach) for instance, you can do just that through the rent to own home arrangement.

What’s a rent to own home arrangement in South Bay? It’s similar to the rent to own car arrangement. In a rent to own car arrangement, you rent the car for a specified period. If you like the car during this period, you can proceed with purchasing the car.

In the same vein, you can initially rent a South Bay area home. By actually living in the property, you can determine the actual conditions of the house prior to buying it. The benefit of the rent to own home arrangement is therefore a good way of investing in real estate.

Consider the Rent to Own Home Arrangement in South Bay Area!

The rent to own home arrangement has been growing in appeal with many people, and business in this area has been vigorous. It may be attributed to the advantages of this arrangement for the parties involved.

• One advantage would be that you can gather all the information you need about the South Bay home and the neighborhood by actually residing in the house.
• A lower down payment is also another benefit, as compared to the higher down payments on straight property purchases. Thus, if you’re an inexperienced homebuyer or investor, the rent to own home arrangement is a good strategy in determining real estate investments.

Features of the Rent to Own Home Arrangement

Both sellers and buyers in South Bay can benefit from the rent to own home arrangement. The following are some of the features of the rent to own home arrangement:

• The current market largely influences the sale price and the rent price of the property. However, bargaining and negotiations may always be done. Thus, do some research on the South Bay property prior to closing the deal.
• The option period is a very significant consideration. As a buyer, you would want a longer option period, giving you time to repair your credit and build up your equity. A seller, on the other hand, prefers a short option period so that the house can be sold quickly. Nevertheless, any of the options can flop on either of the parties involved. Therefore, market awareness and research is crucial.
• There have been instances when a seller has replaced the current buyer with another person offering a higher price. Thus, when the rent to own home contract is being formulated, it is important for you, the buyer to guard your welfare. Ensure that the contract includes a clause or provision regarding preservation of the price during the option period.
• Generally, a seller prefer quick cash sales. However, the rent to own home option is also profitable for him. Through this option, the seller can earn significant income from the property prior to actually selling it.
• Even when the house is not eventually purchased, the seller can still profit from the rent to own home arrangement through the option fee and rent payments. In addition, he also receives a tax deduction on his mortgage interests during the option period.

In summary, the rent to own home arrangement can benefit both the buyer and the seller. It’s a practical means to investing in real estate in the South Bay area. Think this might be an option you would like to explore in the South Bay? Call us today at (310) 809-0203, we would love to assist you!

Additional Reading:

• Buy property from the Bank and pocket the profits in Hermosa Beach!
• Foreclosure & Fixer Homes for Sale in Redondo Beach, Torrance and San Pedro
• The Darkside of Manhattan Beach Foreclosure
• Now you can own the ultimate MLS map of the South Bay, available exclusively to Realtors!

<–>